September 7, 2006
Corporate Clients to Demand More Electronic Information
There are important changes in the works involving the Uniform Task Based Management System (UTBMS) and for the Legal Electronic Data Exchange Standards (LEDES).
If you deal with the corporate world, you are submitting invoices electronically using the LEDES98 standard or some variations on that standard. Likewise, you are coding time entries using UTBMS codes (at least for litigation matters).
First, the group responsible for the maintenance and improvement of the UTBMS code set has merged with the LEDES Oversight Committee. That group has developed new code sets for trademark, patent and project legal work. The proposed new codes sets are still open to comment. The group plans to formally ratify the final code set prior to the end of 2006.
The big news is the move to XML by the LEDES group. This will begin to impact some firms in 2007, but widespread adoption by law firm corporate clients isn’t expected until 2010. Nevertheless, the impact will be significant, equivalent to the initial phase of electronic billing by corporate clients. What does that mean for the law firm? It means you need to be sure your legal business software vendor is one that keeps their software in synch with electronic billing standards.
The LEDES XML as a replacement of the LEDES98 standard will eventually result in demands from the corporate world for the electronic move of an expanded array of information. In addition to the new LEDES XML standard for billing information, the LEDES Oversight Committee had a new proposed standard for budgeting information. Work underway for timekeeper profile will accommodate the electronic conveyance of timekeeper information such as rates, where and when admitted to the Bar, law school dates, etc.
As it becomes easier to provide information and keep the law firm and corporate client information in synch, the hope is that friction cost is removed from the system, benefiting both law firm and client. However, make no mistake; the corporate objective is to reduce legal cost. Steven Levy with Microsoft Corp., who heads more than one LOC subcommittee, commented at a recent LOC meeting in Orlando that Microsoft saves two percent on law firm bills as originally submitted just by auditing timekeeper rates against engagement rules.
What you can expect is an increase in corporate demands for information. By 2010, you are likely to be submitting budgeting information and regular projected cost updates on work undertaken for major corporations. You are likely to be required to update timekeeper information in real time for any change to that information. Don’t be surprised when your corporate client begins to demand variable rates for timekeepers depending on the complexity of the matter or work undertaken.
Law firms with business and billing software that is not on the leading edge of LEDES developments will find they are at a competitive disadvantage when competing to gain or retain work from major corporations and financial institutions. The following legal business system vendors are on the board of Directors of the LEDES Oversight Committee: Juris, Inc., Aderant, Thomson Elite, and RainMarker.
PS: LEDES XML is also a replacement for the inadequately designed LEDES 2000, which while an XML version, was never embraced by the legal community due to its inadequate design.
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Filed under Technology by Tom Collins